UK North Sea-focused oil and gas company Jersey Oil & Gas said Friday it was in advanced exclusive negotiations with a significant UK North Sea operator over a farm-out of its interest in the Greater Buchan Alpha offshore licenses.
Jersey Oil and Gas has been working to develop the Greater Buchan Area oil production hub project in the UK North Sea, to serve as a hub through which oil discoveries made by several operators in the Greater Buchan Area in the UK North Sea would be developed.
In a statement on Friday, Jersey Oil & Gas said it had agreed heads of terms for the farm-out of a material interest in the GBA licenses to this "significant UK North Sea operator."
"...both parties are working towards finalizing a fully termed agreement in the near future. An exclusivity period until 30th April 2023 has been agreed," Jersey Oil & Gas said.
Andrew Benitz, CEO of Jersey Oil & Gas, said: "We are pleased to be in advanced exclusive negotiations with a well-funded industry heavyweight and whilst there can be no guarantees of a successful conclusion, we are aiming to finalise the farm-out in the near future and look forward to updating shareholders shortly."
Jersey Oil & Gas, in March 2021 announced the concept selection for the Greater Buchan Area project, with the development centered around a single, normally manned, integrated wellhead, production, utilities, and quarters platform, powered from shore, to be located at the Buchan field.
In April 2022, the company said work was progressing "to expand the development options in order to facilitate the farm-out process, with opportunities to utilize existing infrastructure for future production from the GBA under evaluation.2
It said at the time that engineering studies were being completed in collaboration with the various counterparties to validate and de-risk the different development solutions and facilitate the negotiation of commercial constructs for the GBA farm-out.
Jersey Oil & Gas said in its April 28, 2022, update that the range of competing development solutions, including tie-backs to existing platforms and re-use of available FPSOs, could enhance the overall development economics.
In the central North Sea area referred to as the Greater Buchan Area ("GBA"), Jersey Oil & Gas holds operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 oil discovery and an 100% working interest in the P2170 Licence Blocks 20/5b & 21/1d, that contain the Verbier oil discovery and other exploration prospects.